Accounting for R & D expenses
1. Internationally accepted accounting treatment of R & D Overview
With national accounting practice, the accounting treatment of R & D expenditures can be summarized into three categories: the International Accounting Standards as the representative of conditional capital of treatment; to the United States as the representative of the cost of processing methods; to the Netherlands represented by the capitalization approach.
(1) The full cost of the accounting treatment. Is the current place of business all the research and development costs as expenses for the period through profit or loss.
(2) all the capital of the accounting treatment. Research and development costs is up in the event of imputation period, until the successful development of a gain begins to be amortized.
(3) The accounting treatment of conditional capital. Is required to meet some conditions, be capitalized on the research and development costs, or to be incurred.
2. On three R & D expenses in accounting methods, comparison and evaluation of
(1) expense. R & D activities is difficult to predict the ultimate success will be all the research and development costs in the event of the period through profit or loss as a period charge, in line with the principle of prudence.
(2) capitalized. The research and development costs as capital expenditures included in the value of underlying assets, while the value of the underlying assets of the formation of the accounting period in the future be amortized over its match with the future earnings, in line with the matching principle.
(3) conditional capitalized. Rational point of this method lies mainly in its line with the principle of proportion. But it also has many flaws: If the only eligible development expenditure included in the asset, the value of its intangible assets is neither true nor comprehensive, does not meet the principle of truthfulness.
